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What is Recourse Factoring?

April 26, 2017factoring recourse

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10 Posted

What is Recourse Factoring?

1 Answer

0

10 Posted

In the event that a Debtor does not pay the invoice, Recourse Factoring allows the Factor to come back to the Seller for payment. The risk of insolvency does not transfer to the Factor when an invoice is purchased. If a customer refuses or is unable to pay the invoice (due to bankruptcy), you (the Seller) must buy back the unpaid invoice or exchange it with another receivable of equal or greater value. Since Recourse Factoring offers the least amount of risk to the Factor, this factoring agreement offers the lowest fees.